My first experience with robo-advisor investing and I am not impressed at all. Simply put robo-advisor investment is a 'do-it-for-me' platform, which uinlike a DIY investment platform, which lets you select your own investments, robo investing will place you in a portfolio tailored to your risk appetite. This is based on a questionnaire that asks you about your investment goals and attitude to risk.
They invest into certain areas following their algorithm which is aiming to be more accurate than an individuals opinion.
Wealthify was founded in 2016 and backed by Aviva. I first heard about it thanks to an offer they had advertised on Money Saving Expert website where if you invested £50, left it alone for 1 year, you would then get a £50 bonus on top of your initial investment.
So my plan was to invest in the most aggressive portfolio available, in the case that even if it went down, I would still have what was left plus the £50 bonus.
I opened this this in February 2022 and looked at it since. I decided today just to see what was going on out of curiosity. Remember, I am on their 'adventurous' plan. Which is made up of 81% shares, mostly in the USA but some UK, Global and emerging markets also. Topped up with some bonds and property to round it all up.
I was blown away with how poor the performance has been in that time. I'm not interested in the finances returned as I only put down £50, and my plan would be to take this initial investment and the bonus to move into my Vanguard once I qualify for the bonus.
The return since opening was 0.92%!
At least it was in the positive I guess.....
I compared this to my Vanguard where the S&P had a change of 3.21% and my US Equity had a change of 4.43%.
Now obviously both these funds are 100% stocks, so not completely similar to compare.
Another thing to note is the alure of robo-investing is it allows someone who perhaps may lack confidence to be guided into a fund suitable to their risk.
Fees:
Now let's look at the fees.
For Wealthify we have a fairly hefty 0.6%.
Compared to the 0.07% of the S&P on Vanguard and the 0.10% for the US Equity these fees are much higher - which sucks.
Summary:
I invested into Wealthify purely because of the bonus on offer. Once February 2024 comes around I will take my £100 (or close enough) and invest it into my Vanguard US Equity fund.
Poor performance compared to other products available and with high fees that aren't justified. My opinion is shared with many on Google, and just a snippet of others who aren't impressed.
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